Available online at www.sciencedirect.

com

ScienceDirect
Agriculture and Agricultural Science Procedia 3 (2015) 137 142

The 2014 International Conference on Agro-industry (ICoA): Competitive and sustainable Agroindustry for Human Welfare

Current Condition of Agroindustrial Supply Chain of Cassava

Products: A Case Survey of East Java, Indonesia
I.B. Suryaningrat*, Winda Amilia, Miftahul Choiron
Study Program of Agroindustrial Technology, Faculty of Agricultural Technology, University of Jember, Indonesia
Jln. Kalimantan 37, Jember, 68121, East Java, Indonesia

Abstract
As an agricultural product, cassava is recognized as a special commodity which has high potential for local and export product.
High production cost and low selling price are still become common problem faced by farmers. These common problem leads to
low income for the farmers. The opinion to cassava product as unimportance product with low profit has consequence to make
low of institution involvement to this product. The objective of this research was to evaluate the current condition of supply chain
of cassava products. Direct visit to the farmers and discussion with some industries were implemented to this research. Sampling
method was used to reach accurate data from farmers and industries in each research area. It was starting from the industries
which use cassava as raw material for production process. The result revealed that strong involvement actors in supply chain of
cassava product were farmers, big and small collectors, industries (processors or producer), food store and consumers. The details
of flow of material, financial and information were identified in this research. Added value of selected products of cassava also
explained is this paper.

Publishedby
byElsevier
ElsevierB.V.
B.V. This is an open access article under the CC BY-NC-ND license
2015
2015 The
The Authors.
Authors. Published
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Jurusan Teknologi Industri Pertanian, Fakultas Teknologi Pertanian, Universitas Gadjah
Peer-review
under responsibility of Jurusan Teknologi Industri Pertanian, Fakultas Teknologi Pertanian,
Mada.
Universitas Gadjah Mada
Keywords: cassava; supply chain; industry; added value

* Corresponding author. Tel.: +62 331321784; fax: +62 331321784.

E-mail address: suryaningrat2@yahoo.com

2210-7843 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Jurusan Teknologi Industri Pertanian, Fakultas Teknologi Pertanian, Universitas Gadjah Mada
doi:10.1016/j.aaspro.2015.01.027

138

I.B. Suryaningrat et al. / Agriculture and Agricultural Science Procedia 3 (2015) 137 142

1. Introduction
Cassava is one of commodity which has big potential to be produced as local and export product. As a raw
material of some industries, some kind of processed cassava products such as dried chips (namely gaplek), tapioca
flour, modified cassava flour (mocaf), and cassava rice. Various products of cassava lead to the farmer to plant
cassava as potential product with high profit product. Presently, some traditional products of cassava are made by
some home industries or small and medium enterprises.
On the other side, Saragih (2004) explained that agriculture development with production increasing without
better income need to be improved through new agriculture development paradigm to realize improved income of
farmers. This new paradigm is an agribusiness approach. Daryanto (2009) described that industrial raw material
procurement from agricultural sector needs strengthening of agricultural sector to secure raw material supply for
continuity of industrial activities and cost efficiency of transport. In term of raw material supply, Indarjit and Pranoto
(2002) defined that supply chain is a network of organizations with same objective, which is supply and distribution
of materials. Connected points alongside chain with different role are called stakeholders. A clear relationship
between stakeholders and farmers would give a clear mechanism of pricing process from farmers to stakeholders.
In term of marketing, Limbong and Sitorus (1987) explained that marketing is the distribution activities of
agricultural material from producers to consumers. The product moving with long chain caused quality reduction of
product. This also gives strong effect to reduce farmers income. Wardana(2006) also described that the farmers and
small scale industries often in the low bargaining power positions. Regulation and strategy are strongly required to
improve agroindustrial cassava product and improve farmers income.
In raw material market, middlemen have a strong role to drive cassava market. Its mean farmers have weak of
bargaining power in the market. Because of long distance location of farmer from industry, farmers prefer sell their
product to middleman. This was also due to high cost of transport which could reduce their profit. All of these were
strong reasons for low of bargaining power of the farmers in cassava market (Wardana, 2006). Low ability and
information around capital investment (time value of money) were also enhancing low selling price of the cassava.
The farmer was still in the weak position among market players. Limited information of market characteristic
leads to the farmer to involve in traditional and modern market. The role of stake holder alongside supply chain was
also needed to be analyzed to identify role of institution and partnership of cassava product The objective of this
research was to evaluate the condition of supply chain of cassava as agroindustrial product.
2. Methodology
This research was conducted in 2 districts with high number of cassava production namely Jember and
Bondowoso. Beside production number, these districts were considered by distance of location from industry.
Sampling method was implemented by field area and the number of farmers, to reach data based on proportion
between farmers and industries in each area.
Stakeholder analysis was used in this research to identify the raw material supply. In term of supply chain
institution, direct visit and brief discussion was implemented by purposive sampling, to identify raw material flow
from field to industry. Beside material flow, financial flow and information flow were used to evaluate supply chain
flow of cassava products. Added value analysis was also implemented to this research to define present condition of
selected cassava products.
3. Result and Discussion
3.1 Selected Products of Processed Cassava Industries
This research was conducted in the district of Jember and Bondowoso. Respondent were grouped based on
industrial tree. In this research population of small industries were first level industries of industrial tree. The first
level industries of industrial tree were fermented cassava (tape), cassava flour (tepung singkong), kerupuk (dried and
fried cassava) and cassava chips (keripik). Result showed that small industries used cassava as raw material to
produce cassava processed products. In the next processing level, other products made from fermented cassava are

I.B. Suryaningrat et al. / Agriculture and Agricultural Science Procedia 3 (2015) 137 142

suwar-suwir (fermented cassava fig), prol tape (fermented cassava cake) and pia tape (fermented cassava pie). All of
these product were categorized as traditional products as a local products.
Table 1. Selected Products of Processed Cassava Industries in Jember District
Name of Industry (kinds of
processed product)

Market (distance)

Raw material come from

(distance)

Raw material requirement

(kg/year)

Samiler Kemuning (boiled

and fried cassava)

Local district (40 km)

DesaArjasa (20 km)

60,000

Tape Reza 99 (fermented

cassava)

Local district / province

(100 km)

Mayang (15 km)

62,000

Tape Putih 67 (fermented

cassava)

Local district (40 km)

Silo (15 km)

45,000

Chips (cassava chips)

Local district (100 km)

Silo (20 km)

90,000

Field survey revealed that raw materials (cassava) were supplied from some places with distance of 15-20 km
from processing places (Table 1). High quantity of raw materials was required to supply production of some selected
products. Chips product was the highest number of raw material requirement followed by fried products and
fermented products. Transportation facilities and road condition were still faced by supplier to send the raw material
to production place. These lead to late of supply and decreasing of raw material quality.
In case of marketing activity, these selected products were also marketed (distributed) to other districts in same
province with range of 100 km distance (Table 1). Beside packing method of product, roads condition and
transportation facilities were also still faced as common problems to the producers. This indicates that the products
have a strong potential cause to defected products during distribution process (Austin, 19982). This was relevance to
Suryaningrat (2012), a survey result found that in fruit processed product, defected product in distribution processed
could reach 10-20% because of transportation facilities and road conditions.
3.2. Stakeholders (Supply Chain Actors) and Roles
All of supply chain actors above have different characteristics and roles to the pricing mechanism on supply chain
of cassava. Different characteristic of the stakeholders are mentioned in the Table 2.
Field survey revealed that pricing factor was the importance factor to cassava product as the raw materials flow.
All of stakeholders have an involvement in pricing mechanism, but in each stakeholder has different level to decide
the price. As a starting point, farmers provide information of raw materials such as price, number and quality of
product. But in the reality, its price was decided by wholesalers or next persons. In term of information, wholesalers
and retailers has stronger involvement in this raw material flow. Industries has noon formal contract with
wholesalers or retailers to maintain information about price, number and quality of product because of high numbers
of raw materials requirement.
The institution or organizations which organize activities of cassava farmers could not be found in this research
area. Low of attention to cassava farmers was still face by cassava farmers because to the cassava product image as
low profit or low prospect business of cassava product.
Table 2.Characterisitics and Roles of Chain Actors

Stakeholders

Characteristics

Roles

Farmers (supplier)

Plantation, supply raw material from field

Provide raw materials (materials and information

about price, number and quality)

Wholesalers

Buying, collecting and selling sell to the industries or

retailer at market.

Offering price to the farmers (information)

Retailers

Selling cassava to industries or market, sell cassava to

consumers at market

Get price from wholesalers and offer price to the

industries and market (information)

Industries

Processing cassava as first level products or half products

Got price from wholesalers or retailers

139

140

I.B. Suryaningrat et al. / Agriculture and Agricultural Science Procedia 3 (2015) 137 142

3.3 Supply Chain of Selected Cassava Products

In simple supply chain, farmers supplied raw material to small collectors and big collectors. Big collectors send
the raw material to the industries because of the high quantity requirement of cassava. Small collectors supply for
non-industrial customers like retailer, traditional market, or other small number requirement. In some case of high
supply season, big collectors also shared this fresh cassava with small collectors. Two type of customers were non
industrial and industrial customers. The detail of supply chain with kind of cassava product shows in the Fig. 1.
Consumers
Financial flow
Fried cassava
Pie
Big collectors

Industries

Cassava
Chips

Brownies
Consumers

Fermented

Supplier of
cassava

Fig

Small collectors

Retailers

Consumers

Suwar-suwir/
candy

Information flow

Fig. 1. Supply chain of selected products of Cassava

Pujawan (2005) mentioned that in supply chain mechanism, three aspects should be well managed are material
flow from upstream to downstream, financial flow from downstream to upstream, and information stream from both
upstream and downstream. In Fig. 1, required raw material (cassava) of selected products such as fried cassava,
cassava chip and fermented cassava were supplied by big collectors due to high number of industrial requirement. It
was common for the farmers have a contract with big collectors to make sure about number, price and quality of
products. Time schedule to send the raw material to the industries including transport facilities were also discussed
between farmer and industry. In the research area, the highest requirement of cassava came from fermented cassava
industry compare with dried and cassava chips. Beside direct consumption of fermented cassava, this product was
also used as a raw material of pie (cake), brownies, fig and suwar-suwir. There were many industries involve in
these products. This leads to high requirement of cassava as raw material in second level of product transformation.
Related to the requirement of cassava as raw material, availability of cassava including quantity and quality was the
most problem faced by these industries. Especially for fermented cassava industries which need yellow cassava.
Quality of cassava was defined from freshness, maturity, colour, and size depend on kind of product would be
processed. In term of transport facilities, road condition and truck were the most problem happened to these
industries. This was also because of plant location of cassava which difficult to be accessed. All of these problem
lead to inefficient of cost and time in raw material supply of these industries.
In term of financial flow, it was starting from consumers, producers of food products, retailers, small and big
collectors, and farmers. Consumers spend their money to buy final product (cassava processed products) in the
market or food store. High number of consumers would result to better performance of agroindustrial including
better production capacity and profit. Transaction process in consumer level was conducted in cash payment in food
traditional market and other market place. Payment process between store and production (industry) was conducted
in cash and credit. It was frequently that the credit payment process between store and industries was conducted after

141

I.B. Suryaningrat et al. / Agriculture and Agricultural Science Procedia 3 (2015) 137 142

selling process (sold). Payment from industries to collectors and from big or small collector to farmers was
conducted in cash. Only some of them conducted in credit payment or extended payment. All of payment process
tends to trust concept as a commitment among them.
Information flow in cassava product was started from both side of farmers and customers. Information of
requirement was coming from market (industries) and retailer (traditional market). This raw material requirement
has a strong relationship with industrial capacity including order status and quantity would be sent to industries.
Beside, this was also related to order quantity of processed products which distributed to the market. A strong
commitment was needed in this mechanism to support transparent information flow from all supply chain actors.
This could be reach from partnership to make a deal among them. The information (data) should be supported in this
flow were production capacity to support agroindustries process, agroindustrial activities to produce products,
product shipping based on the order, and consumer needs to the products. The accurate data of cassava price,
quality and availability as information were also required to support supply chain activities. All of this information
flow mechanism should be supported by good communication tools as a supporting facility.
3.4 Added Value of Cassava Products
Table 3 shows that in cassava products the ratio of added value has a range from 51% (cassava chips) to 80%
(cassava cake). Cassava chips product has a simple making process compare to other products. High quantity of raw
materials causes this low of added value ratio. Brownies and cake are the highest added value ratio. These products
were made from fermented cassava as main raw material. High production quantity with high product price caused
these products (brownies and cake) have highest ratio than others. Crackers and fermented cassava products have
similar added value ratio. In research area, most of cassava products industries were using traditional technology,
low number of workers, and low education level workers. These factors related to technical factors such as
production capacity and using of raw materials. Higher processing technology, better packaging process, supported
by higher education level of workers are strongly required to improve cassava products to meet consumers needs.
Table 3. Added Value of Cassava Products
Name of Industry (selected
cassava products)

Number of
Production
(kg/year)

Raw material
Requirement
(kg/year)

Number
of
Workers

Product
price
(Rp/kg)

Raw material
price (Rp/kg)

Added
value

Ratio of
added value
(%)

Samiler (crackers)

12,000

60,000

25,000

1,500

3,500

70

Tape kuning (fermented

cassava)

43,500

62,000

10,000

2,000

5,016

71.5

Cassava Chips Singkong

51,480

90,000

12,000

1,700

1,160

51

Tape Putih (fermented

cassava)

32,000

45,000

9,500

2,000

4,755

70.3

Brownies (made from

fermented cassava)

15,000

9,000

26,000

10,000

33,300

77

Cake (made from fermented

cassava)

18,000

10,000

24,000

8,000

31,600

80

4. Conclusions
Transportation facilities and road condition were still faced by supplier to send the raw material to production
place. These lead to late of order and decreasing of raw material quality. Strong involvement actors in supply chain
of cassava product were farmers, big and small collectors, industries (processors or producer), food store and
consumers. In financial flow, it was starting from consumers point to farmers using cash and credit method as
common payment. Information flow in cassava product was started from both side of farmers and customers, and
should be supported with well communication facilities to reach clear and transparent information. High production

142

I.B. Suryaningrat et al. / Agriculture and Agricultural Science Procedia 3 (2015) 137 142

quantity with high product price caused products brownies and cake reach the highest added value ratio than other
products.
References
Austin, J.E., 1992. Agroindustrial Project Analysis. Critical Design Factors. EDI Series in Economic Development.2 edition. The Johns Hopkins
University Press. USA.
Daryanto, A., 2009.DinamikaDayaSaingIndustriPeternakan.Ariefdaryanto.blog.mb.ipb.ac.id. Bogor. (02 Oktober 2012)
Drilon , J.D., 1971. Introduction to Agribusiness Management.Agribusiness Managemen Resources materials.Vol. 1.Asian Productivity
Organization.
Hayami, Y. et al., 1987. Agrucultural Marketing and Processing in Upland Java: A Perspective from A Sunda Village. CGPRT Bogor. Ch. 6.
pp.40-46.
Indrajit, R.E.R danDjoko Pranoto.,2002. Strategi Manajemen Pembelian dan Supply Chain.Grasindo. Jakarta
Iqbal,M.,2007.Strategi Pengendalian Alih Fungsi Lahan Pertanian Bertumpu pada Partisipasi Masyarakat. Bogor: Pusat Analisis Sosial Ekonomi
dan Kebijakan Pertanian.
Limbong, W.H. dan P. Sitorus., 1987. PengantarTataniagaPertanian. Jurusan Ilmu-Ilmu Sosial Ekonomi Pertanian Fakultas Pertanian Institut
Pertanian Bogor. Bogor.
Nwokoro, S.O.; Orheruata, A.M.; and Ordiah, P.I., Replacement of Maize with Cassava Sievates in Cockerel Starter Diets: effect on performance
and carcass characteristics, Tropical Animal Health and Production., 2002, Vol. 32 No. 2. Pp 68-74
Pujawan, I.N., 2005. Supply Chain Management. Penerbit Guna Widya, Surabaya
Saragih., 2004. MembuatNata de Coco. Jakarta :PuspaSwara.
Suryaningrat, I.B., 2012. Controlling Factors Of Marketing Activities: A Case Study Of Fruit Processing Industries In East Java, Indonesia,
presented paper at International Conference of Agricultural Marketing. pp 297-307.
Tonukari, N.J., 2004, Cassava and The Future of Starch, Electronic Journal of Biotechnology, ISSN: 0717-3458, Vol. 7 No.1 April 15 2004. pp.
72-78
Wardhana, K.B.F., 2006.Analisis Strategi Pengembangan Industri tapioca skala kecil di Desa Karang Tengah Kabupaten Bogor.Institut Pertanian
Bogor. Bogor